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October 18, 2013

The Art of Investing in Photo Collecting

A Sotheby’s expert explains how investors should approach this unusual market

With the arrival of phone cameras and social media sites, it seems everyone is a photographer nowadays. Investors who enjoy photography and want to add a new hard asset to their portfolios, however, might want to consider purchasing historic, collectible photos or contemporary photos taken with standalone cameras.

Like other fine art markets, it’s misleading to speak of a single photography market, because there are multiple submarkets.

Denise Bethel, head of the photographs department at Sotheby’s in New York, notes that classic photos — the equivalents of blue-chip stocks — are a major category. Several of these photos, often dating from the early 20th century, each have sold for more than $1 million at auction.

There’s also a thriving market in contemporary photography, says Bethel, and the top photos in that category can command seven figures.

The variety of categories gives collectors considerable choice.

“We do have collectors who collect across the board,” says Bethel. “So, for instance, collectors who start with Daguerreotypes and go all the way to contemporary photography.

“And, we also have collectors who specialize so there are collectors who only collect, let’s say, American modernist photography from the first half of the 20thCentury or European 19th-Century photography or contemporary photography,” she explains. “So, we’ve got people who collect every decade of photography and then we have people who are more specialized.”

In addition to numerous periods and types, photo prices cover the spectrum. Consider Sotheby’s early October auction in New York. Sales totaled over $5 million, but a large number of the lots sold for less than $10,000.

Apart from the auction houses, online galleries such as PurePhoto.com also offer collectible photos at a wide range of prices.

Careful Consideration

There’s a standard piece of advice given to collectors of fine paintings and other expensive collectibles: Unless they have very deep pockets, they can either buy art that they love and not worry about building a collection or they can focus on building a collection that will have more appeal to potential buyers.

Photo collectors can accomplish both goals, says Bethel. “You can certainly craft a very good collection by buying what you like,” she says. “You can do both simultaneously. I don’t think you have to do one or the other. I’d recommend that you do both simultaneously.”

As with any collectible, buyers need to know their market or be able to hire experts with that knowledge. Fortunately, there are ample educational resources available, including websites, books, auction catalogs, and museum and gallery displays, for example.

Bethel advises prospective collectors to spend at least a year looking before purchasing anything. The learning process can include going to museum exhibitions, photography galleries and fine art galleries that sell photography and previewing multiple auctions.

There’s also a vast wealth of photography books available today, she says. “I know that when I started back in 1980, you could buy the essential photography books you needed by buying 10 or 20 books,” she says. “Now, walk into any bookstore and the photography section is huge.”

The expert also suggests that potential buyer get on the mailing lists for catalogues put out by the different auction houses.

“Look and learn before making that first purchase. And, then, once you do start to purchase things, I recommend keeping up, keeping up with the auction market, keeping up with what’s going on in museums, keeping up with the gallery scene,” Bethel explains. “And, of course, there’s always the option of hiring an art advisor who knows the territory to help you.”

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